At George Mason University, we are always interested in facilitating mutually beneficial relationships
with industrial partners, and we recognize, that because of our different cultures, private industry and
universities sometimes approach contract negotiation from very different perspectives. To that end, and in
an effort to make the negotiation process easier, we are forwarding the attached brief summary of the
University’s perspective on standard contract clauses to you as a potential corporate sponsor of university
research. Because these clauses cause varying degrees of difficulty for George Mason University when
entering into sponsored project agreements, we hope that a preview of the University’s position regarding
these issues will streamline our future negotiations. While these may not be the only items we might
identify during negotiations, these are issues that routinely arise in our negotiations with private industry.
The items listed below provide an overview of George Mason University’s positions on a number of
standard contract terms and conditions. They reflect core University values and include a brief discussion
of some of the elements influencing Mason’s position on standard contract terms and conditions. They
are intended to serve as a general overview to provide a foundation prior to entering into specific contract
discussions.
1. Assignment – The Commonwealth Attorney General’s office will not support contracts that allow for
the assignment of the contract to another party unless Mason agrees to the assignment in writing.
2. Confidential/Proprietary Information – Because the culture of a university is collegial where
faculty and students are expected to share new knowledge with each other and the public,
confidentiality clauses along with non-disclosure agreements need to be as limiting as possible.
The name of the person to receive the information must be designated in the agreement AND the
person named must sign the agreement. It is also important that the agreement state that all
confidential or proprietary information be labeled as such, that it be given to the individual in writing,
and that there is a signature of receipt by the receiver of the information.
It should be noted here that because the work of graduate students on sponsored projects is
supposed to contribute to their theses and dissertations, it is only under the rarest of circumstances
that they are given confidential or proprietary information. Such cases require special approval by a
faculty committee.
3. Contract Type – We have a very strong preference for cost reimbursable contracts. Occasionally,
we will agree to a firm fixed price or level of effort contract; however, because faculty do not
account for time through a time-keeping system, the documentation required for level of effort
contracts is extremely difficult and cumbersome to produce.
A Time and Materials contract, where the billing for individual effort is grouped by government
defined labor categories, is not an appropriate contracting vehicle for universities, especially
because they risk putting the University into non-compliance with federally required cost accounting
standards. Our difficulty with labor categories stems from the fact that the variation in faculty
salaries cannot be accounted for in terms of standard industrial job classifications. Rather, salaries
are related to teaching expertise, scholarly publications, and other measures that have no
equivalencies in the corporate or government world. It is therefore impossible for us to make a
reasonable mapping of a number of individuals to one labor category without the possibility that the
variation in salary range might be well over $50,000, thereby creating a potential financial risk to the
University. It should be noted that in the rare circumstance, where only one faculty member
occupies one labor category, we could handle the Time and Materials mechanism.
Office of Sponsored Programs
4400 University Drive, MS 4C6, Fairfax, Virginia 22030
Phone: 703-993-2988; Fax: 703-993-2296
4. Disputes Resolution – The Commonwealth Attorney General’s Office prohibits its state agencies
from committing the Commonwealth to third party arbitration, even non-binding arbitration. If a
contract dispute cannot be resolved through good faith negotiations of the parties, legal remedy
must be an option.
5. Governing Law – As a state agency, the University cannot enter into a contract where the
governing law is that of another state. Our preference is to cite Virginia law as the governing law of
the contract.
6. Attorney’s Fees – The Commonwealth’s Attorney General does not permit its state agencies to
accept provisions which authorize the payment attorney’s fees.
7. Indemnity/Hold Harmless – Because of the self-insurance plan that the Virginia General Assembly
has authorized for state agencies, those agencies cannot enter into indemnification or hold
harmless agreements. The Va. Code that underlies this restriction is §2.2-1837.A.1(c). Exceptions
can be made only by the Governor and even in that circumstance, it must be for the public interest
and there must be a ceiling put on the liability. It is important to note that this restriction applies to
any and all references to indemnity or hold harmless.
As an alternative, we can offer the following language, which has been approved by the
Commonwealth Attorney General’s Office:
To the extent provided by the laws of the Commonwealth of Virginia, George Mason University
shall be responsible for the ordinary negligent acts or omissions of its agents and employees
causing harm to persons not a party to this agreement. The (contractor, vendor, donor, agency,
etc.) agrees that it shall be responsible for the ordinary negligent acts or omissions of its agents and
employees causing injury to persons not a party to this agreement. Nothing herein shall be
deemed as a waiver of the sovereign immunity of the Commonwealth of Virginia. If requested, the
University will provide a certificate of liability insurance coverage under the Commonwealth of
Virginia Risk Management Plan.
8. Insurance – The University is covered by insurance through the Commonwealth of Virginia’s Risk
Management Plan. Although we can neither agree to other levels of coverage, nor can we name
the sponsor as a co-insured, we can provide a certificate of coverage to attach to the contract.
9. Intellectual Property – Our typical language regarding intellectual property rights states that
intellectual property developed under an agreement belongs to the organization employing the
inventor. From the University’s perspective, this position protects the rights of the inventor; it
protects the University’s tax-exempt status; and it ensures that after protection, commercialization
efforts will maximize the benefit to the public. We do, however, want to recognize the important role
of our corporate sponsors and so will give the sponsor a first option to secure a royalty bearing
exclusive license or non-royalty bearing non-exclusive license.
We realize that issues of intellectual property ownership are complex and often critical to the
agreement. We therefore encourage a dialogue regarding this issue if the corporate sponsor is not
comfortable with the University’s base-line position.
10. Invoicing – There are so many variations in invoicing clauses that it is difficult to discuss all the
potential problems. However, the University prefers to be able to invoice monthly with payment due
in thirty days. In reviewing invoicing clauses, we are particularly mindful of requirements which
include the provision of copies of documents other than a simple display of the expenses incurred
the previous month. Often invoicing clauses contain information requirements, which are
impossible for the University to meet.
In determining invoicing procedures, it is also important to remember that universities are not
subject to the cost accounting principles set forth in the Federal Acquisition Regulations (FAR),
Subpart 31.2, as these are commercial cost principles. The cost principles governing universities
are issued through the Office of Management and Budget Uniform Guidance, 2 C.F.R. Part 200.
This document is referenced in FAR 31.3.
11. Use of Mason Name and Logo – In order to protect the University’s name and logo, we require
that its use be approved prior to use by any outside party, in every instance.
12. Organizational Conflict of Interest – When entering into subcontracts where the prime sponsor is
the federal government, we are sometimes faced with the FAR’s flow down requirement covering
Organizational Conflict of Interest. (FAR, Part 9). However, we have a firm policy which precludes
us from allowing the actions of one faculty member to restrict the activities of another. In the past,
we have successfully used the alternative language below so that each faculty member agrees not
to be in conflict, but the institution is not on the whole subject to this clause.
Each individual assigned by the Subcontractor to perform work shall certify that there are no
relevant facts or circumstances relating to his or her activities that could give rise to an
organizational conflict of interest, as defined in FAR Subpart 9.5, or that he or she has disclosed all
relevant information.
The conditions specified under this clause shall not be deemed to restrict the subcontracting and
consulting activities of the Subcontractor personnel who are not assigned to perform work for XXX.
However, the Subcontractor shall notify XXX in the event that such other personnel are involved
with any potential bidder for a contract to the YYY (federal agency).
13. Publications – We believe that faculty and students must be free to disseminate the results of their
research; however, we also recognize that corporations need to protect the proprietary ideas, which
will contribute to the monetary success of the firm. To resolve this apparent conflict, we do often
give sponsors the right to review publications for a limited time (preferably 30 to 60 days, but no
more than 90 days), but the review MUST be limited to the inclusion of proprietary or confidential
information. In no case can we allow language, which might allow the sponsor to block publication
or force a change of tone, opinion or results. The following is a typical clause we use for
publications:
Sponsor recognizes that under University policy, the results of the project must be publishable and
agrees that researchers engaged in the project shall be permitted to present at symposia, national
or regional professional meetings and to publish in journals, theses or dissertations, or otherwise of
their own choosing the methods and results of the project; provided however, that the Sponsor shall
have been furnished copies of any proposed publication or presentation at least sixty (60) days in
advance of the submission of such proposed publication or presentation to a journal, editor, or other
third party. Sponsor shall have 60 days after receipt of said copies, to object to the publication or
presentation because of the inclusion of patentable subject matter that needs protection and/or
there is confidential information of Sponsor contained in the proposed publication or presentation.
In the event that Sponsor makes such objection, the parties shall negotiate an acceptable version.
14. Publicity – We can agree not to publicize the fact that we are engaged in a particular project.
However, we must restrict that limitation to external publicity so that we can circulate our awards
lists, etc.
15. Renewal – As a matter of policy, Mason does not enter into agreements, which are automatically
renewed at the end of their terms. Any renewals must be agreed to by Mason in writing.
If you would like to discuss these issues or would like additional information, please contact
Eileen Gallagher, Assistant Director, Contracts, in the Office of Sponsored Programs,
or call 703 993-2292.
